Factors Associated With Choice of Pharmacy Setting Among DoD Health Care Beneficiaries Aged 65 Years or Older

BACKGROUND: Department of Defense (DoD) health care planners want to stimulate a voluntary migration of prescription fills from military and community pharmacies to its mail-order pharmacy, a lower-cost dispensing option for the department. Beneficiary cost share for a 90-day supply of generic/ brand medication is $0/$0 at military (DoD) pharmacies, $3/$9 at the DoD mail-order pharmacy, and $9/$27 at network community pharmacies. OBJECTIVES: To examine the pharmacy use patterns among the beneficiary population age 65 years or older, traditionally the heaviest users of the TRICARE DOD prescription drug benefit, to identify factors that are associated with beneficiary use of pharmacy setting(s). METHODS: Outpatient prescription fill records were examined for TRICARE beneficiaries age 65 years or older (N=300,084) residing in North Carolina, Texas, and California for dates of service from December 1, 2004 through February 28, 2005. Binary logistic regression models were run for each type (military, community, and mail order) and number of pharmacy settings used by beneficiary gender, age group, catchment area status (located either within or outside a 40-mile radius of each military pharmacy), state, and number of medications obtained (defined as count of unique combinations of strength, and route of administration). The mean number of medications per beneficiary and cost per medication were tabulated for each type and number of settings used. RESULTS: In the 3-month period from December 1, 2004 through February 28, 2005, beneficiary use of military, community, and mail-order pharmacies was 45.4%, 67.6%, and 22.1%, respectively. About 67% of the study population used 1 setting exclusively and 2.4% used all 3 settings. Noncatchment residents were significantly less likely (adjusted odds ratio [AOR]=0.080; 95% confidence interval [CI], 0.078-0.082) to use a military pharmacy exclusively and significantly more likely to use a community pharmacy (AOR=4.64; 95% CI, 4.55-4.73) or the mail-order pharmacy (AOR=3.92; 95% CI, 3.80-4.05) exclusively than were catchment residents. Beneficiaries taking 10 or more medications were more likely (AOR=8.43; 95% CI, 8.21-8.65) to use multiple settings than were those who obtained 3 or fewer medications. Single-setting users obtained a median of 4 (interquartile range [IQ]) 2-7) medications with a median copayment of $7.00 (IQ $0-$13.19) per medication. Those who used all 3 settings obtained a median of 9 (IQ 7-12) medications with a median copayment of $4.33 (IQ $3.00-$6.00) per medication. Among beneficiaries who obtained 6 or more unique medications during the 90-day study period, approximately 25% used the mail-order pharmacy to obtain 1 or more prescription fills. CONCLUSIONS: A significant portion of the study population did not use the mail-order pharmacy despite the financial incentive to use mail-order rather than community pharmacies. Relatively small financial incentives alone may be inadequate for promoting a switch to the mail-order option among those beneficiaries not already using it in a pharmacy benefit plan with low copayments. Larger monetary and other incentives may be necessary to achieve the desired transfer of prescriptions fills to the mail-order pharmacy and the associated reduction in military pharmacy workload.

T he escalating role of prescription pharmaceuticals in disease management, particularly among older adults, has focused greater attention on the nature of the pharmaceutical dispensing environment. Mail-order pharmacies have emerged as an alternative to store-front pharmacies for reducing dispensing-related costs and dispensing errors through centralization and automation, 1 but the extent to which a mailorder pharmacy option is available to consumers or the factors that influence their use of that option are not clear. Survey-based studies consistently report high consumer satisfaction with insurance plans that include a mail-order pharmacy option, but it is unclear whether ratings are driven by the financial incentives associated with using a mail-order option or a preference for one pharmacy setting over another. [2][3][4][5] Like many health care plans, the Department of Defense (DoD) health care plan, TRICARE, has incorporated a mailorder option to help curb the rising cost of its prescription drug benefit. The TRICARE drug plan offers beneficiaries the option of filling prescriptions at military pharmacies, at community pharmacies, or through the centralized TRICARE mail-order BACKGROUND: Department of Defense (DoD) health care planners want to stimulate a voluntary migration of prescription fills from military and community pharmacies to its mail-order pharmacy, a lower-cost dispensing option for the department. Beneficiary cost share for a 90-day supply of generic/ brand medication is $0/$0 at military (DoD) pharmacies, $3/$9 at the DoD mail-order pharmacy, and $9/$27 at network community pharmacies.
OBJECTIVE: To examine the pharmacy use patterns among the beneficiary population age 65 years or older, traditionally the heaviest users of the TRICARE DOD prescription drug benefit, to identify factors that are associated with beneficiary use of pharmacy setting(s).
METHODS: Outpatient prescription fill records were examined for TRICARE beneficiaries age 65 years or older (N = 300,084) residing in North Carolina, Texas, and California for dates of service from December 1, 2004 through February 28, 2005. Binary logistic regression models were run for each type (military, community, and mail order) and number of pharmacy settings used by beneficiary gender, age group, catchment area status (located either within or outside a 40-mile radius of each military pharmacy), state, and number of medications obtained (defined as count of unique combinations of strength, and route of administration). The mean number of medications per beneficiary and cost per medication were tabulated for each type and number of settings used. RESULTS: In the 3-month period from December 1, 2004 through February 28, 2005, beneficiary use of military, community, and mail-order pharmacies was 45.4%, 67.6%, and 22.1%, respectively. About 67% of the study population used 1 setting exclusively and 2.4% used all 3 settings. Noncatchment residents were significantly less likely (adjusted odds ratio [AOR]= 0.080; 95% confidence interval [CI], 0.078-0.082) to use a military pharmacy exclusively and significantly more likely to use a community pharmacy (AOR = 4.64; 95% CI, 4.55-4.73) or the mail-order pharmacy (AOR = 3.92; 95% CI, 3.80-4.05) exclusively than were catchment residents. Beneficiaries taking 10 or more medications were more likely (AOR = 8.43; 95% CI, 8.21-8.65) to use multiple settings than were those who obtained 3 or fewer medications. Single-setting users obtained a median of 4 (interquartile range [IQ]) 2-7) medications with a median copayment of $7.00 (IQ $0-$13.19) per medication. Those who used all 3 settings obtained a median of 9 (IQ 7-12) medications with a median copayment of $4.33 (IQ $3.00-$6.00) per medication. Among beneficiaries who obtained 6 or more unique medications during the 90-day study period, approximately 25% used the mail-order pharmacy to obtain 1 or more prescription fills.
CONCLUSION: A significant portion of the study population did not use the mail-order pharmacy despite the financial incentive to use mail-order rather than community pharmacies. Relatively small financial incentives alone may be inadequate for promoting a switch to the mail-order option among those beneficiaries not already using it in a pharmacy benefit plan with low copayments. Larger monetary and other incentives may be necessary to achieve the desired transfer of prescriptions fills to the mail-order pharmacy and the associated reduction in military pharmacy workload.
KEYWORDS: Department of Defense, Mail-order pharmacy, TRICARE pharmacy (TMOP). DoD purchases medications under a federally mandated pricing structure that allows it to stock medications at its military pharmacies and at TMOP at a lower cost than the reimbursements paid to community pharmacies used by TRICARE beneficiaries.
TMOP and the military pharmacies are also able to dispense medications less expensively through centralization and formulary management, and savings are passed on to beneficiaries in the form of reduced cost shares. Thus, DoD has determined that a shift of workload out of the community pharmacies into the military pharmacies and TMOP would be cost-effective for the department and reduce copayments for the beneficiaries. Many military pharmacies, however, already face a heavy workload serving active duty personnel and their families. Rather than further strain the capacity at military pharmacies, DoD wants to motivate a voluntary migration into TMOP, particularly by age 65+ beneficiaries who are the largest consumers of prescription medications. To accomplish this migration, planners require a better understanding of the factors associated with age 65+ beneficiary use of each pharmacy setting.
We examined a 90-day census of prescription data for a sample of age 65+ DoD health care beneficiaries who used their TRICARE benefit to fill their prescriptions. Our objective was to characterize the users of each pharmacy setting and identify key factors associated with use of the mail-order pharmacy option.

nn The TRICARE Pharmacy Benefit
The TRICARE pharmacy benefit is available to all DoD beneficiaries, including those 65 years and older. The DoD senior beneficiary population comprises primarily career military service retirees, their spouses, and survivors of deceased service members. Senior veterans and their dependents are eligible for TRICARE when they have completed a full military career before retiring from military service. Beneficiaries require only a valid DoD identification card and a written or electronic prescription from their doctor to use their pharmacy benefit. Beneficiaries may use their TRICARE pharmacy benefit without using any other health care services offered under TRICARE.
The TRICARE pharmacy benefit covers most prescription medications as well as some over-the-counter products (e.g., diabetic supplies). TRICARE does not impose a cap on the drug benefit, but it does place quantity limits and prior authorization requirements on specific medications. TRICARE policy mandates that all prescriptions be filled with a generic product if one is available. However, exceptions may be made to this policy in military pharmacies and in TMOP if DoD can dispense a brand medication at a lower cost than its generic equivalent.
The military pharmacies generally stock medications across all drug classes, but the breadth of inventory may be narrower than for community pharmacies and TMOP, depending on the size of the military pharmacy and the nature of the beneficiary population it supports. For example, the military pharmacy may stock only the generic form or a single brand of a medication in a given drug class, such as generic omeprazole and brand rabeprazole, but not brand omeprazole, lansoprazole, pantoprazole, or esomeprazole in the class of proton-pump inhibitors. TMOP typically offers the same breadth of brand and generic medications that is available from community pharmacies.
During our study period, a beneficiary' s cost share depended on the pharmacy setting and whether the drug was generic or brand, as shown in Table 1. Military and mail-order pharmacies could dispense up to a 90-day supply of medication at a time, free of charge or with 1 copayment, respectively. Community pharmacies charged 1 copayment for each 30-day (or less) supply of medication. A 90-day supply was the maximum amount of medication that could be dispensed at a time from any pharmacy setting. Thus, a 90-day supply of medication would be associated with a copayment of $0 at a military pharmacy, $3 or $9 at TMOP, and $9 or $27 at a network community pharmacy for generic and brand medications, respectively. Use of non-network pharmacies has higher associated cost shares for the beneficiary and is an option used primarily by beneficiaries residing overseas and in remote locations in the United States.
DoD contracts with Express Scripts Inc., a private company, to administer the TRICARE mail-order pharmacy program. Beneficiaries may fill prescriptions by mail, phone, or fax, or online, and any beneficiary may use the mail-order option. Beneficiaries who have prescription drug coverage from other health insurance (OHI), however, can use the TRICARE mailorder pharmacy only if (1) the medication is not covered under their OHI or (2) they have exceeded the dollar limit of coverage under their OHI. Federal law mandates that OHI is the first payer for mail-order prescription services for TRICARE beneficiaries  6 Beneficiaries who wish to use their OHI and their TRICARE benefit to obtain medications covered under both plans ared irected to an etwork community pharmacy.T he use of OHI by study beneficiaries to purchase prescription medication occurred infrequently.

nn Methods
DoD maintains an enterprise-wide information system that captures patient demographic and prescription information for each prescription filled by ab eneficiaryu sing his or her TRI-CARE pharmacy benefit. Afi ll recordi sc reated in real time when the prescription is filled, regardless of whether am ilitary or community pharmacy or TMOP is used. The fill records are forwarded to acentral data repositoryfor processing to remove transactions that have been reversed (e.g., prescriptions that werefilled but never picked up) and coded with an auto-generated, encrypted patient identifier that enables researchers to link pharmacy and health cares ervice records for the same person without including any protected health information in the study datasets. This data repositoryw as the source for the data used in this study.
We examined prescription fill data for residents in 3t arget states-North Carolina, Texas, and California-to account for the possibility of regional differences in pharmacy use. Each state represents 1ofthe 3TRICARE regions nationwide-North (North Carolina), South (Texas), and West (California)in which the uniform health careb enefit is independently administered. Each of these states also contains alarge age 65+ beneficiarypopulation and multiple militarypharmacies where beneficiaries may obtain prescription medication at no out-ofpocket cost. Collectively,these 3states comprise approximately 25% of the age 65+ DoD beneficiarypopulation nationwide.
Ac ensus of outpatient pharmacy fill records for beneficiaries aged 65 years and older who resided in the target states for a9 0-day period (December 1, 2004 through February2 8, 2005) was extracted from this central repository. Fill records associated with the 171 beneficiaries who relocated from or to at arget state during the study period weree liminated from the sample. Approximately 0.7% of the fill records weret hen excluded from the dataset because they werem issing data or they represented medications administered by ac linician during ac linic visit. The resulting 2,726,608 fill records were aggregated into unique beneficiaryr ecords that included all prescriptions filled during the study period. The final study dataset included fill records corresponding to 1,857,268 unique medications dispensed to 300,084 beneficiaries.
The number and percentage of beneficiaries residing in each target state weretabulated by beneficiarygender,age group and catchment status, number of prescription medications obtained, types of pharmacy settings used, and number of pharmacy settings used during the 90-day study period. Beneficiaries were categorized as catchment residents if they resided within a 40-mile, ZIP code-based radius of amilitaryhospital (housing a large militaryp harmacy with al arge drug inventory) or within a20-mile, ZIP code-based radius of amilitaryclinic (housing a smaller militarypharmacy with asmaller drug inventory). DoD established these hospital and clinic catchment areas to define its health careservice areas and perform demand forecasting and management analyses to ensures ufficient capacity for the beneficiaryp opulation. Beneficiaries who did not reside within these areas wered esignated as noncatchment residents. The number of medications was defined as the total number of unique medications filled during the study period, as identified by the First DataBank generic code number (GCN). Each GCN specifies the active ingredient, strength, dosage form, and route of administration and provides amethod of linking brand drugs with generic equivalent products (i.e., simvastatin 20 mg shares aG CN with Zocor 20 mg). Thus, each drug (e.g., simvastatin) has multiple GCNs-a GCN for each unique combination of drug strength, and route of administration Binaryl ogistic regression models werer un to predict use of each type of pharmacy setting exclusively and the total number of settings used, by beneficiaryg ender,a ge group, catchment status, target state, and number of medications obtained. In the equations predicting use of the pharmacy setting, the dependent variable was coded "1" if the setting was used exclusively,a nd "0" if it was not. For the equation predicting number of settings, the dependent variable was coded "0" if only 1pharmacy setting was used, or "1" if multiple pharmacy settings wereused to fill prescriptions during the study period. Backwards stepwise regression was applied using the likelihood ratio statistic ( P <0.05) to eliminate variables that did not significantly contribute to use of the setting. The c-statistic was used to evaluate model discrimination. Interaction terms using gender, age group, and catchment status werei nitially included in the models, but later removed since they did not improve model discrimination.
Finally,t he median and interquartile range (IQ) for the number of medications obtained, the patient expenditure, and the patient cost per medication was calculated. All data manipulations and analyses wereperformed using Statistical Package for Social Sciences (SPSS), Base 10.0. This study was reviewed by the TRICARE Management Activity exempt determination officer on November 21, 2005, and found to be exempt from institutional review boardreview under 32 CFR 219.101(b)(4).

nn Results
The number and percentage of TRICARE pharmacy benefit users by gender,age group, catchment status, and use characteristics in each target state arep resented in Table 2  The adjusted odds ratios (AORs) and 95% confidence intervals (CIs) for the binarylogistic regression for each type of pharmacy setting used exclusively during the study period are presented in Table 3. Women weresignificantly morelikely than men to use community pharmacies exclusively (AOR =1.36; 95% CI, 1.34-1.39), and men arem orel ikely to be exclusive users of the other 2s ettings. Militaryp harmacy use decreased and community pharmacy use increased with increasing beneficiarya ge. Use of TMOP exclusively peaked with the 70 to 74-year age group (AOR =1.14; 95% CI, 1.10-1.19) but remained relatively constant compared with patterns observed for other pharmacy settings.
The AORs and 95% CIs for the binarylogistic regression for the number of pharmacy settings used during the study period arep resented in Table 4. Single-setting use was more common among women (AOR =1.10; 95% CI, 1.08-1.12) and noncatchment residents (AOR =1.20; 95% CI, 1.18-1.22) and generally increased with increasing patient age. Variations in the number of settings used by target state wereg enerally small. Single-setting use decreased and multiple-setting use increased substantially as the number of medications obtained increased. Beneficiaries taking 10 or morem edications werem orel ikely (AOR =8 .43; 95% CI, 8.21-8.65) to use multiple pharmacy settings than weret hose who obtained 3o rf ewer medications during the 90-day study period. The values of the c-statistic indicate that the models accurately predicted 70.9% of the ob-served setting use. Table 5presents the median and IQ ranges for the number of medications obtained, the total patient expenditure, and the cost per medication during the 90-day study period for the types and number of pharmacy settings used. Users of military pharmacies exclusively incurred the lowest median patient expenditures ($0) and cost per medication ($0), and users of community pharmacy exclusively incurred the highest median patient expenditures ($57.00 [IQ, $17.00-$105.00]) and cost per medication ($12.21 [IQ, $8.87-$17.00]). Overall, as the number of pharmacy settings used increased, the median number of medications obtained and median patient expenditurei ncreased but the median cost per medication decreased. Beneficiaries who used only 1p harmacy setting obtained a median of 4( IQ, 2-7) medications and paid am edian cost of $7.00 (IQ, $0-$13.19) per medication. Those who used all 3 pharmacy settings obtained am edian of 9( IQ, 7-12) medications and paid am edian cost of $4.33 (IQ, $3.00-$6.00) per medication.
Ag raphical presentation of the relative percentage of mail-order users and nonusers by the number of medications obtained during the study period is presented in the Figure. The percentage of beneficiaries using mail order increased as the number of medications obtained increased, but the percentage of mail-order nonusers exceeded the percentage of mail-order users by afactor of 2to3,regardless of the number of medications obtained.

nn Discussion
Our findings indicate that the strongest predictor of age 65+ beneficiaries' decision making regarding their prescription purchases is the number of medications (as defined by unique GCN) they obtain. Beneficiaries who obtained relatively few medications werem orel ikely to obtain all their medications from as ingle pharmacy setting, and residential proximity to a militaryp harmacy contributed significantly to the choice of setting used. Not surprisingly,c atchment residents werem ore likely to use militaryp harmacies, wherea ll prescription medications wereobtained at no cost to the beneficiaries. Those who lived outside the catchment areas werem orel ikely to use community pharmacies or the mail-order pharmacy,despite the copayment requirements associated with the use of both settings. This finding suggests that the out-of-pocket costs incurred by use of these pharmacies werepreferable to spending the time, energy,orexpense of travel to asource of copaymentfree medications. This finding is consistent with survey-based findings that found convenience to be ap rimaryc onsideration in consumers' choice of pharmacy. 7 The relationship between catchment status and beneficiary decision making diminished among heavier consumers of prescription medication, who werem orel ikely to use multiple types of pharmacies to obtain their medication. These findings are consistent with prior studies that found that maintenance medication users are skilled at identifying the most cost-effective source for each medication they use and more motivated to obtain each medication from the source that will minimize their own out-of-pocket expenses. 8-10 Beneficiary gender and age were lesser but still significant contributors to beneficiaries' use of each type of pharmacy. Women and older adults, who are traditionally the heaviest users of prescription medication, were significantly more likely to use only 1 type of pharmacy setting, likely a community pharmacy, to obtain their medications. Men and younger seniors had a higher likelihood of using multiple settings, military pharmacies, and the mail-order option.
In general, we found that state of residence was a relatively minor contributor to age 65+ pharmacy use patterns compared with other factors examined. We found, however, that California residents obtained the lowest mean number of medications per beneficiary despite having the highest mean beneficiary age. They were also more likely to use TMOP than were residents of North Carolina and Texas, despite having higher proportions of catchment area residents. It is not clear whether these observations are attributable to the differences in regional administration of the TRICARE benefit or a larger phenomenon associated with a regional or California-specific health care culture. Our findings are consistent with a prior Express Scripts study that    found California had one of the lowest per-member per-year prescription medication use averages in the country. 11 Increased use of mail-order pharmacies by seniors nationwide has been reported in recent years, presumably as a result of drug plan incentives that increase the days supply of medication obtained per copayment dollar spent. 12 Clearly, the existing TRICARE copayment structure contains this type of financial incentive to promote use of TRICARE' s mail-order pharmacy over community pharmacies. Our findings suggest, however, that the relatively small out-of-pocket generic/brand cost savings of $6/$18 per 90-day supply of medication has been inadequate for motivating many community pharmacy users to use the mail-order option. Furthermore, use of military pharmacies by 45% of age 65+ beneficiaries to obtain copayment-free prescription medications is less expensive for DoD but places a strain on the capacity of military pharmacies, whose first priority is the treatment of active duty personnel so that they may return to duty.

Factors Associated With Choice of Pharmacy Setting Among DoD Health Care Beneficiaries Aged 65 Years or Older
Anecdotal evidence suggests that many beneficiaries, particularly retired active duty personnel, view the trip to the military installation as an opportunity to not only obtain free medications, but also shop at the commissary and coordinate visits with former colleagues and other retired service members. Thus, it is not clear that a reduction or elimination of the copayment requirement under the mail-order program, currently under consideration by DoD planners, would provide an adequate incentive for the 78% of the beneficiaries who are not mailorder users to begin using TMOP.
The literature includes successful examples of formulary copayment restructuring to motivate the use of generic or preferred medications. [13][14] Several studies have also observed higher mail-order use among populations covered by plans with larger financial incentives. [15][16] But few data are available that directly measure changes in mail-order use following implementation of financial incentives that promote voluntary mail-order pharmacy use.
Given the relative convenience and cost savings associated with the existing mail-order program, particularly for noncatchment residents, the low use suggests that beneficiaries may either be unaware of the program or unable or unwilling to use it. Beneficiaries who have traditionally relied on the pharmacist for advice may view the mail-order option with skepticism, particularly older patients who may have a lower comfort level with the concept of a "virtual" drugstore. Any changes to the TRICARE prescription drug benefit should be accompanied by a significant patient education and marketing effort that focuses attention on the benefits and ease of using the mailorder program.
These findings highlight the challenge faced by DoD to stimulate a voluntary migration of the workload associ- Factors Associated With Choice of Pharmacy Setting Among DoD Health Care Beneficiaries Aged 65 Years or Older ated with pharmacy benefits for the aged 65+ population to TMOP. Among the study population, approximately two thirds of beneficiaries aged 65 or older elected to use a community pharmacy for some or all of their medications, despite it being the most expensive option under the TRICARE pharmacy benefit. Perhaps this choice is because even in community pharmacies, the copayment requirements imposed on TRICARE beneficiaries are substantially lower than those imposed on other insured populations. A national survey of health benefits reported average prescription copayments of $10, $22, and $35 for generic, preferred, and nonpreferred formulary medications, respectively, for insured workers in 2005. 17 TRICARE beneficiaries have a relatively rich pharmacy benefit, and the financial incentive to use mail-order pharmacy is small.
It is important to note that some beneficiaries in the present study may have required only 1-time prescription fills for the treatment of an acute condition, and, as such, did not represent good mail-order candidates. Under these circumstances, use of the local community pharmacy would likely have been the most expeditious source for the needed medication. Our findings revealed, however, that approximately 75% (n = 108,379) of study subjects who obtained 6 or more unique medications during the study period did not use the mail-order pharmacy. A prior study on the age 65+ TRICARE beneficiary population found that maintenance medications dominated the medication lists of TRICARE beneficiaries, and treatments for cardiovascular disease, high blood pressure, diabetes, and arthritis topped the list of most commonly used medications. 18 These beneficiaries represent the ideal target population for DoD' s migration initiative for the transfer of prescription fills from community and military pharmacies to TMOP.

Limitations
The first limitation is the absence of important subjective information regarding beneficiary decision making that drives their pharmacy use patterns. More study is needed to investigate beneficiaries' perceptions of and attitudes toward use of the mail-order pharmacy that ultimately must be addressed to achieve the desired migration of workload out of military pharmacies. Survey-based studies investigating these issues are currently underway.
Second, our reliance on prescription fill data for our study may present other limitations. Our use of GCNs to count medications may have resulted in an overestime of medications used during the study period when beneficiaries filled multiple prescriptions that differed in strength, dosage form, or route of administration. It is also likely that some beneficiaries obtained additional medications not captured in our dataset, including those dispensed outside the 90-day study period or as part of a hospitalization. The study dataset would also not capture fill data for beneficiaries who used other health insurance (without using TRICARE as a second payer) or no insurance to pay for their medication. Third, since our study sample was not drawn randomly from the age 65+ DoD health care beneficiary population, our findings may not be generalizable to the beneficiaries who resided in nontarget states.

nn Conclusion
If DoD intends to succeed in transferring more of the workload associated with providing pharmacy services to TMOP from military and community pharmacies, it will need to address the lack of significant financial or other incentives for beneficiaries to use mail order for maintenance medications.